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With no Brexit deal in sight, eyes will be on the BOE possibly expanding its QE program this week.

How will markets react?

Here’s a shortlist of potential catalysts to watch if you’re trading the pound this week:

BOE’s policy decision (Nov 5, 12:00 pm GMT)

  • Now that England is on a one-month lockdown, investors will look to the Bank of England (BOE) for fresh stimulus
  • BOE will likely increase its asset purchasing programme by 100B GBP. This would mark the third expansion since the pandemic started and would take the total to 845B GBP, almost twice the size before the pandemic
  • Investors don’t see any more negative rate talks until there are Brexit deal developments

Market risk sentiment

  • With no other domestic catalysts, the pound could trade as a high-beta currency for the rest of the week
  • Uncontested U.S. election results could lead to risk rallies
  • Policy announcements by the Reserve Bank of Australia (RBA) and the Fed can also inspire intraday volatility for the pound
  • Rising coronavirus cases and the impact of lockdowns can weigh on risk sentiment

Technical snapshot

  • The pound has gained value against the comdolls and other European currencies in the last seven days
  • GBP’s small gains were overshadowed by its 1% losses against the safe havens
GBP Forex Pairs Performance from MarketMilk
GBP Forex Pairs Performance from MarketMilk
GBP Forex Pairs Stochastic from MarketMilk
GBP Forex Pairs Stochastic from MarketMilk
  • GBP saw the most volatility against the safe havens and the comdolls in the last seven days
GBP Forex Pairs Volatility from MarketMilk
GBP Forex Pairs Volatility from MarketMilk